South African lender Absa Group reported an 8% rise in half-year headline earnings on Tuesday, supported by higher revenue and lower credit impairment charges.
Headline earnings
Headline earnings grew to R12.8-billion in the six-month period ended June 30.
Absa, the third-biggest lender by assets in South Africa, declared an interim dividend of 850 cents per share, up 8.3% year on year.
Revenue rose 4% to R58.8-billion as net interest income increased 3% to R37.4-billion, driven by growth in customer loans and deposits despite margin pressure.
Non-interest income and expenses
The group’s net interest margin fell to 4.46% from 4.58%, as lower interest rates in its rest-of-Africa operations and competitive lending and deposit pricing in South Africa’s corporate and investment banking business offset the benefits of balance-sheet growth.
Credit impairment charges
Non-interest income increased 6% to R21.4-billion, supported by growth in fee and commission income on increased client activity and higher lending volumes and a strong trading income contribution from Global Markets.
Operating expenses rose 4% to R31.4-billion, producing a slightly higher cost-to-income ratio of 53.4%.
Credit impairment charges declined 1% to R7.1-billion, resulting in an improved credit loss ratio of 94 basis points from 100 basis points.
- Absa Group's half-year headline earnings rose 8% to R12.8 billion for the period ended June 30.
- The bank declared an interim dividend of 850 cents per share, up 8.3% year on year.
- Revenue increased 4% to R58.8 billion, with net interest income rising 3% to R37.4 billion.
- Non-interest income grew 6% to R21.4 billion, supported by fee and commission income and strong trading income.
- Credit impairment charges fell 1% to R7.1 billion, improving the credit loss ratio to 94 basis points from 100 basis points.
